There has been no let up in demand for units in the newly-listed Fonterra Sharehold Fund (FSF) with $120m worth trading in a couple of hours and the price rising 23 per cent.

Units in the fund surged over 20 per cent in their first few minutes of trading. They listed on NZX at 12.15pm at $5.50 apiece but had risen 21.6 per cent to $6.69 each with over $33 million of units changing hands in the first 15 minutes. The first trade went through at $6.66.

By 2.30pm, they were up 23.2 per cent to $6.78 each with almost $120m traded. That is a much larger volume than an entire normal day's trading for NZX.

The beginning of live trading was marked by a farmer, Philip van der Bijl, ringing a bell at the stroke of midday.

‘‘I think 666 for some people means something but I hope it doesn’t for our shares. This is an exciting day for us. It’s an historic day for our farmers, our business and for New Zealand. We are seeing the true market price right now.’’

Investors buying units in the FSF have bought the economic rights to Fonterra shares, that is the dividends, but the units have no voting rights and farmers retain control of the big Co-operative.

NZX strategy and sales manager, Sam Stanley, said there was plenty of trading in an impressive start.

‘‘We have had a great start. We are 21 per cent up on the reference price of $5.50.’’

The trading was shown on live feeds in a marque at the new Fonterra milk processing site at Darfield, 45 kilometres west of Christchurch and attended more than 350 farmers and other guests.

Fonterra’s chairman-elect John Wilson said that today marked a milestone in the company’s capital restructure.

Fonterra’s farmers rejected several years ago selling shares in the big co-op but gave the company the blessing by a fairly narrow margin to these new arrangements in which outside investors can buy shares in the FSF but have no control over the co-op.

‘‘During the last three years we have paused, we have listened, we have reset our plans and they are all the better for the time we have taken to get your feedback and understand your concern.’’

Today’s launch has been eagerly awaited by investors, who have long griped about the lack of access to New Zealand’s rural economy which is largely privately controlled.

‘‘Certainly the New Zealand market, in certain areas, does lack a bit of representation, and food is one of those that people are starting to focus on,’’ said David Price, a broker at Forsyth Barr.

The FSF is part of Fonterra’s Trading Among Farmers scheme, which saw the creation of two capital pools. The first of these, the Fonterra Shareholders Market, is a private market where farmer-shareholders can trade shares in the dairy giant.

The FSF, which is open to the public, differs in that it’s a market where investors can buy units which behave like shares, but don’t come with ownership rights. That means outside investors can buy and sell the units, and will receive a dividend payment, but don’t get a say in how the company is run as traditional shareholders do.

The structure has the advantage in that it protects Fonterra from a hostile takeover, because even if one party bought all the FSF units they don’t represent equity in the diary producer and so could not take control of the firm.

Critically, units in the FSM can be converted into FSF units, allowing farmers looking to leave the market to cash out their capital in the firm without putting a strain on Fonterra’s cash flows – which was why the scheme was launched in the first place.

The units are expected to offer a gross dividend yield of about 5.5 per cent, which puts it towards the bottom end of scale for NZX50 companies.